One day after corporate chieftain Rajat Gupta was sentenced to two years in prison after his conviction on insider trading charges, a different judge sentenced a former AT&T employee who pleaded guilty to sharing privileged information with investors to one year’s jail time.
Alnoor Ebrahim, who pleaded guilty in June to sharing sales information for AT&T handset devices, including the iPhone and Blackberry. Mr. Ebrahim, who was sentenced by Judge Paul J. Oetken, was paid more than $180,000 for his work with expert network Primary Global Research, which consisted of hundreds of calls with the firm’s clients.
Rajat Gupta, the former chief executive officer of McKinsey & Co., was sentenced to two years imprisonment for insider trading this afternoon during a hearing presided over by Judge Jed Rakoff at the U.S. Southern District courthouse.
Mr. Gupta, who was convicted in May of using his position on the board of directors at Goldman Sachs to pass privileged information to Galleon Group hedge fund manager Raj Rajaratnam, has sought probation in lieu of imprisonment. The government recommended a jail term of eight to 10 years.
“With today’s sentence, Rajat Gupta now must face the grave consequences of his crime,” said U.S. Attorney Preet Bharara in an emailed statement. “His conduct has forever tarnished a once-sterling reputation that took years to cultivate. We hope that others who might consider breaking the securities laws will take heed from this sad occasion and choose not to follow in Mr. Gupta’s footsteps.”
Over at Dealbook, Peter J. Henning offers two recent insider trading cases filed by the Securities and Exchange Commission to describe the
Well, the point is that the SEC appears to be pushing on the definition of insider trading, and whether that’s because it’s running out of traditional cases to try, or wants to Read More
Finally, sense: As you may recall, Bill Johnson was slated to assume Duke Energy’s chief executive office per the terms of a merger between Duke Energy and Progress Energy. (Mr. Johnson had run Progress Energy before the merger.) Well, Mr. Johnson did assume the office, but on the next day he left the company, scooping Read More
One minute, Edward Brogan was being courted by brokers at the biggest Japanese banks, who treated the Japan Advisory hedge fund manager to Italian meals and late-night visits to certain, clothing-optional type of establishment. The next minute, he’d disappeared amid insider trading allegation. From Reuters:
For anyone who’d like to see the bank executives who led America into the teeth of the financial crisis strung up by the laces of their Prada wingtips, a trip to the Southern District courthouse in Lower Manhattan may be a deflating experience.
The Observer had come to the federal courthouse seeking succor. Late last Read More
FINANCIAL CRIMINAL OF THE DAY
The elegant townhouse at 169 East 71st Street has played a role in two great dramas—starring first as the facade of Holly Golightly’s apartment in Breakfast at Tiffany’s, and decades later acting as the hideout of owner Peter E. Bacanovic, the disgraced Merrill Lynch broker who spent five months in prison as part of the Martha Stewart insider trading scandal.
And who knows what lies in store next for the gracious old beauty, bought for $5.97 million, a smidge over the $5.85 million ask? The buyer was mysterious Cyprus-based Costalea Holdings Limited. Is more glamor and intrigue even possible?
Fancy New Jobs
A tech analyst named John Kinnucan was arrested today, accused of insider trading on tech companies that resulted in $110 Million in illegal, insider trader-y gains. Maybe as important as his crime is the example he sets for future generations of those whose lifelong dream it is to get your door busted down by the F.B.I., arrested for insider trading, and consequently extradited to New York for trial.
Mr. Knnucan’s experiences set a handy, simple, two-step example for those seeking to tread the same path he’s taken:
Disgraced Galleon Group chief Raj Rajaratnam—better known to the world as “Big Raj” or simply “Raj Raj”—was sent to the slammer for 11 years after being busted for insider trading last year, in what was 2011′s most high-profile financial crime trial. Now one of the guys who helped send him there is moving to greener pastures. “Greener,” as in, he’ll be making exponentially more cash likely defending the guys he used to send to the pen. This is how the world works!
Raj Rajaratnam is likely in the market for some new “inside” tips about now: how he’s going to survive eleven years in prison, the sentence for the $64M worth of insider trading he was recently found guilty for that was handed down today. UPDATED: It’s being suggested that Raj is going to the same prison as Bernie Madoff, The Federal Correctional Complex in Butner, N.C.